EST2417. Real Estate Taxation Affecting Estates, Gifts, and Trusts

This session will cover beyond the basics of real estate taxation: sales price less basis and expense of sale. We will delve into various IRC sections that dictate how the holding of and sale of real estate by an estate and trust are treated. We will explore the rules for making gifts of real estate both before and after death. We also will spend time reviewing the computation of basis and how which state the owner, grantor, or decedent lives (lived) in matters. We also will look at how IRC section 1031 still works relative to the disposition of real estate. In addition, we will look how Form 1041 reporting differs from Form 1040 – both in respect of before death (grantor trust) and after death by an estate and an irrevocable trust. We also will discuss installment sales of real estate both before and after the death of the holder of the installment note dealing with income in respect of a decedent.

Learning Objectives:

• Determine the impact of real estate transactions on estates and trusts from a planning standpoint and on the ultimate taxation of the transaction.
• Analyze tangential concepts and ideas that touch real estate taxations such as 1031 deferred exchanges and state tax withholding situations that then drop down to beneficiaries or heirs.
• Identify how the real estate is to be handled from a vesting standpoint that ultimately can affect how the taxation on the sale of the real property is treated.